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Construction workloads grow but skills shortage and Brexit concerns remain

  • 16/11/2017
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Construction workloads grow but skills shortage and Brexit concerns remain
Workloads in UK construction and infrastructure continued to rise in Q3 2017, according to the latest RICS UK Construction and Infrastructure Market Survey.

However, despite the continuing growth in activity – 22% of those surveyed saw a rise in workloads in the quarter – skills shortages and Brexit uncertainties are proving to be stubborn themes.

The Royal Institute of Chartered Surveyors (RICS) revealed that 62% of respondents thought skills shortages were impacting growth – against an average of 40% since data collection first began in 2012.

“Having eased throughout 2016, the intensification of labour shortages is biting once more,” RICS said.

Within the 62% of those who highlighted skills shortages as an obstacle to their business, respondents were twice as likely to cite a shortage of quantity surveyors as compared to civil engineers. And among trade occupations, the shortage of bricklayers remained the biggest recruitment challenge.

Despite government efforts to attract more apprentices through an apprenticeship levy introduced this spring, the effectiveness of publicly funded programmes remain unclear: 42% of respondents felt that government funded programmes were moderately effective, but one-third were unsure of their impact.

Furthermore, the survey highlighted the inadequacies of the incoming talent – with only 45% of employers viewing their current apprentices as a long-term solution to their hiring needs.

“Challenges related to an inadequate supply of skilled labour are as pronounced as ever,” said Jeffrey Matsu, senior economist at RICS.


Brexit and finance

Meanwhile, Brexit-related uncertainties continue to weigh on investment decisions. More than two-thirds (69%) of respondents said that access to bank finance and credit remains the biggest challenge to construction, followed by cash flow and liquidity – with RICS saying that this “likely reflects a more cautious stance by banks given cyclical market conditions and Brexit considerations”.

“Uncertainties due to Brexit continue to weigh on companies’ investment and hiring decisions, and banks appear to be adopting a more cautious stance to providing finance,” said Matsu.


Optimism nonetheless

Despite Brexit concerns and the ever-present skills shortage, however, the survey showed a relatively optimistic industry: of those surveyed, 30% more respondents expect employment to rise rather than fall in the next year.

In addition, a net balance of 45% of respondents said they expected headline activity to continue to rise rather than fall over the year ahead – although this is down from the four quarters immediately preceding the EU referendum, which averaged 62%.

“While activity in the sector has moderated, growth and growth expectations remain in positive territory,” added Matsu.

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